Water Electrolysis Market Share Driven by PEM Electroliser Adoption and Growth in Energy Storage Applications | Valuates Reports

Water Electrolysis Market Size
The global Water Electrolysis revenue was US$ 219.2 million in 2022 and is forecast to a readjusted size of US$ 733.1 million by 2029 with a CAGR of 18.6% during the forecast period (2023-2029).

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The Water Electrolysis market is witnessing accelerating growth as industries transition toward clean hydrogen production to support decarbonization and sustainable energy systems. With electrolysis emerging as a core technology for generating green hydrogen from water using electricity, the market size continues to expand rapidly-driven by key market trends in renewable energy integration, fuel cell development, and industrial decarbonization.

By type, PEM (Proton Exchange Membrane) electrolysers are capturing a growing market share, favored for their compact design, high efficiency, and responsiveness to variable renewable energy sources. These characteristics make PEM systems ideal for applications where space, dynamic operation, and purity are critical, such as energy storage, fuel cell electric vehicles (FCEVs), and distributed hydrogen fueling stations. Meanwhile, traditional alkaline electrolysers maintain a significant share of the market, especially in large-scale industrial settings. Their cost-effectiveness, durability, and scalability make them a preferred choice for long-established applications, including bulk hydrogen production in power and chemical plants.

In terms of application, energy storage and fueling for FCEVs is a leading segment, driven by the push for hydrogen-powered mobility and the need to balance intermittent renewable energy. Power to gas solutions-converting surplus renewable electricity into hydrogen for injection into the natural gas grid-are also gaining traction, contributing to grid stability and decarbonization goals. Industrial gases represent another key area, where water electrolysis supports the supply of ultra-pure hydrogen for use in chemical synthesis, refining, and metallurgy. Power plants and steel plants are adopting electrolysis systems to reduce reliance on fossil-based hydrogen and meet stricter emission targets. The electronics and photovoltaics sector further adds to demand, particularly for high-purity hydrogen used in wafer processing and material treatments. The "Others" category encompasses a broad range of pilot projects and emerging uses across municipal utilities, aerospace, and research institutions.

Looking ahead, the market forecast indicates robust and sustained growth, underpinned by government incentives, green hydrogen targets, and rapid scaling of electrolyser production capacity. The Water Electrolysis market is poised to become a cornerstone of the global hydrogen economy, enabling clean fuel generation across energy, transport, and industrial sectors.

Segment by Type

• Traditional Alkaline Electroliser
• PEM Electroliser

Segment by Application

• Power Plants
• Steel Plant
• Electronics and Photovoltaics
• Industrial Gases
• Energy Storage or Fueling for FCEV's
• Power to Gas
• Others

By Company

718th Research Institute of CSIC, Proton On-Site, Hydrogenics, Teledyne Energy Systems, Suzhou Jingli, McPhy, TianJin Mainland, Siemens, Nel Hydrogen, Toshiba, Yangzhou Chungdean Hydrogen Equipment, Areva H2gen, ITM Power, Idroenergy Spa, Erredue SpA, Kobelco Eco-Solutions, ShaanXi HuaQin, EM Solution, Beijing Zhongdian, H2B2, Elchemtech, Asahi Kasei, Verde LLC, Thyssenkrupp, Cummins, Elogen

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